Saturday, September 28, 2013

Twenty and Ten Years Ago This Week

I’ve been in the trade reporting business for upwards of 30 years. And after the first half decade I realized that the truism: “There is nothing new under the sun” is more than a truism – it’s true.

WTD on a monthly basis will outline some of the major stories covered in the newsletter 10 years and 20 years ago to the week.

10 YEARS AGO – SEPTEMBER 2003

From September 15 to 19, 2003 – President Bush (the younger) was chief of state and the crucial “Cancun” World Trade Organization ministerial was supposed to pull through a dying Doha Development Agenda. But it collapsed. Today in Geneva – and later in Bali – WTO ministers will make another desperate attempt to come up with a life-saving “small” WTO trade package for world trade ministers to revive the moribund Doha round.

Speculation today – as it was in September 2003 – is it will take a miracle.

But back in 2003, the United States wasted little time after the collapse of the Cancun ministerial to announce a new strategy of an “ambitious” free trade agreement program. It started with a reinvigoration of President Reagan’s idea of a free trade agreement – from the Bering Straight to Tierra del Fuego – renamed by the Bush Administration a Free Trade Area of the Americas. Didn’t happen, but the Bush Administration ended up with a string of successful FTAs nonetheless.

Mr. Bush – and his crack team at the US Trade Representative’s office – was credited with successfully negotiating 15 FTAs during his two terms in office. That number represents three-quarters of US FTAs now in force. The string of successes were Australia (2005), Bahrain (2006), the Central American Free Trade Agreement with five countries (2004), Chile (2004), Morocco (2004), Oman (2009), Peru (2006) and Singapore (2004). The Bush Administration negotiated three other accords – with Colombia, South Korea and Panama, but they were delayed by the current Obama Administration for three years, until early 2012.

President Reagan was in charge of the country when the first US FTA was reached with Israel in 1985. President Bush (the elder) moved to join the two giant economies of North America in the US-Canada Free Trade Agreement; President Clinton was President when the North American Free Trade Agreement was signed in 1994 and he negotiated the FTA with Jordan in 2000.

President Obama is in charge of the 12-member TransPacific Partnership negotiations. Predecessor Bush committed the United States to those negotiations just before leaving office in 2008.

Negotiations with the European Union, for which the Obama Administration can fully take credit, began in July of this year. (British Prime Minister Churchill first floated the idea of a United States of Europe – including free trade with the United States – just after World War II).

Currency

Also a decade ago, the United States – sparked by a push by the National Association of Manufacturers – started pressuring China on doing something about its intentionally undervalued currency.That “high profile” debate continues today.

TWENTY YEARS AGO – September 13 through 17, 1993.

President Clinton geared up for a country- and Congress-wide push to gain final approval of what turned out to be a controversial North American Free Trade Agreement – negotiated by the previous Bush Administration. Early in the week, the President gathered three of his predecessors the White House – former Presidents Ford, Carter and Bush – to convince Congress that NAFTA was a good idea. Opposition mainly came from organized labor and an influential environment community, both of which worried that the first US FTA with a developing country would lower standards of living and environmental quality on both sides of the southern US border. The United States already had an FTA with Canada.The Clinton Administration had to come up with side agreements to the accord on labor and the environment as a pallative to gain final support from Congress. The Administration finally won over some major environmental groups with its promises of a development bank that would address degradation on both sides of the border, but couldn’t convince labor on a similar labor side letter.Liberal House Democratic Leader Rep. Richard A. Gephardt continued to speak out against the accord during that week in 2003.By mid-week President Clinton was in pro-trade New Orleans to highlight the importance of NAFTA to the country. And ranking Clinton cabinet members – including USTR Mickey Kantor along with Treasury Secretary Lloyd Bentsen – were working on members on Capitol Hill. Commerce Secretary Ron Brown was in the jaws of the enemy speaking in Pittsburgh on how the US steel industry would benefit by freer trade with Mexico.And the Wall Street Journal reported that a public opinion poll showed that 36 percent of the American people outright opposed NAFTA; 25 percent supported it and a full 34 percent had no opinion.

The question for this week is whether President Obama will show his face outside the White House in support of the TransPacific Partnership which is supposed to wrap up by the end of the year. Or will he decide that the benefits of free trade with the biggest and fastest growing nations of Asia and the Pacific side of Latin America are obvious – and need not be questioned either by the American people or Congress.On Friday of this week public citizen groups opposed to TPP noisily demonstrated outside the US Trade Representative’s office while chief TPP negotiators were meeting inside.Also this week in 1993, President Clinton took some administrative actions to ease the US trade embargo on Vietnam, and House Ways and Means trade subcommittee chair, the late Rep. Sam Gibbons, was conducting a lonely fight to normalize trade relations with Vietnam – nearly two decades after the end of the war.Vietnam is now a full partner in the TPP negotiations which will end in a free trade agreement with the United States and 10 other nations.